Economic empowerment through Cooperative, Micro, Small, and Medium Enterprises (SMEs)

is intended to achieve three (3) things at once;-

(a) Are directly related to an increase in pro-poor welfare
(b) Support national economic growth (pro-growth) and
(c) Expansion of business opportunities and employment in order to reduce unemployment (pro
jobs)
Development approach aimed at economic actors, particularly in cooperatives and SMEs is
essential to facilitate access to financial institutions. Poor people need quality financial services
in a sustainable manner, such as savings, time deposits, loans, and various other micro financial
services required.
Cooperative financial services in Indonesia is one of the institutions of microfinance institutions
that are legal entities that operate in the conventional cooperative (called the Credit Unions or
KSP), as well as sharia (called Cooperative Financial Services Sharia or KJKS) which permits
and supporting them by the Ministry of Cooperatives and other UKM.
Therefore, a comprehensive approach in the assessment of the performance of the cooperative
very needed, in particular by using the balanced scorecard (BSC). Application of BSC concept is
relevant to performance measurement as well as a competitive strategy and banking financial
institutions
As low performance achieved does not come by itself but rather the result of a decision-making
process and the activities undertaken by the management (board, Supervisor, manager, and also
includes members) KJK, and influenced by revolutionary trends that happened today such as:
acceleration products and changes in technology, competition, degerulasi, demographic change,
and tendency-a tendency towards public services and information
Factors competitive advantage must come from:
(1) The sources of tangible just as the quality or uniqueness of the products marketed and capital
strength;
(2) Non-tangible resources such as brand name, reputation, and management practices are
applied; and
(3) The capability or competence-competence core complex is the ability to perform a series of
specific job or competitive activities. The performance of the Cooperative Financial Services is
low due to the competitive advantages possessed too low. That is because the application of the
basic types of competitive advantage has not fully implemented an in accordance with the
conditions of the external factors and internal factors facing owned. Success of the cooperative
financial services is strongly influenced by the competitive advantages that are owned and
environmental factors facing and internal environmental factors that are owned and managed in
accordance with the industry who try it. There are three important ideas in the definition of
participation is involvement, contribution and responsibility. Participation as a member of the
owner (participation contribution) may be proposed, supervision, criticism and Sara, capital
contribution and the contribution required alinnya cooperative. While the participation of
members as service users / customers can be the purchase of goods and services produced and or
sell goods and services to cooperatives. To be able to give the waiter who maximum operating
cooperatives be required to efficiently and effective. In The cooperative known three kinds of
efficiency, i.e. the efficiency of the business, the efficiency of members and efficiency of
development. Business efficiency is defined as the achievement of cooperative business
efficiency, and efficiency of members used to see where as far as operative efforts to meet the
needs of members in relation to the improvement of welfare. One reflection of competitive
advantage is the ability of cooperatives to remain "survive" in the "turbulence" environmental
uncertainty. Many cooperatives established by the managers to then not have the ability to "going
concern", and this phenomenon is justification that a cooperative of the establishment does not
have a strategy on how to survive to live and thrive. Furthermore, when a cooperative has had
and get an edge, it can be said that the organization has "survive" and have a positive
performance.
A number of researchers have proposed various models of strategic management. Strategic
management model proposed by Wright, Kroll and Parnell (1996) contains five basic
frameworks, namely:
(1) Opportunities and external threats that include macro environment and industry;
(2) The internal environment that includes the company's resources, the organization's mission
and goals;
(3) Formula strategies include koporasi level, business unit level and functional level;
(4) Implementation of the strategy which includes organizational structure, leadership, authority,
and organizational culture; and
(5) That includes the strategic control process and performance.
External environment
Strategic planning can be divided into four stages of the process that is environmental scanning,
formulate strategy formulation, strategy implementation, and conduct evaluation and control. In
general, the analysis of the external environment will include the macro environment and the
environmental aspects of the industry. Macro environment includes aspects related to the
political, legal, economic, social and technology that may affect the business of the organization.
While the industry environment is an environment that is closer to the business activities of the
organization. Experts termed the management of the external environment as a place where the
bargaining power of buyers, bargaining power seller, the entry of potential new entrants, their
substitutes, and the intensity of competition in the industry company, which all of these are
beyond the control of the company (external factors). These factors cannot be controlled
companies without the right strategy and according to the situation of environmental change.
Rapid environmental change caused uncertainty of business environment (external), and
therefore contributes to the strategic plan that has been formulated Environmental uncertainty
refers to the external environment conditions unpredictable changes, therefore these factors may
affect the ability of members of the organization in decision making.
Internal environment
Internal environment is an environment that describes a resource strengths and weaknesses of an
organization that should be a concern and should be analyzed to determine the extent to which
companies can accommodate the opportunities and threats originating from the external
environment. In the RBV approach the resources owned by the company is much more important
than the structure of the organization to obtain and maintain a competitive advantage. Pearce
Robinson's (2013: 164), further, classify resources into three, namely
(1) The assets are tangible assets, such as production facilities, raw materials, financial resources,
and facilities such as computer technology.
(2) Intangible assets, such as reputation, moral company personnel, technical knowledge, patents,
trademarks, and accumulated experience of the company; and
 (3) The capability of the organization, such as the ability and means to empower (combine)
assets, human resources, and production processes that convert inputs into outputs.
Leadership is needed to build the core values and corporate structure in order to realize the
strategy of the company through the division of labor based on specific tasks and systematic.
Furthermore, the internal analysis based strategy 7S framework stated that there are 7 basic
things that can or should be done and controlled by management to realize the company into
excellence, namely: (1) Strategy,(2) Structure,(3) System, (4) Style, (5) Staffing, (6) Skills, and
(7) Shared Values.
The internal environmental analysis conducted to analyze the strengths and weaknesses of the
company. The measured values of total income benefit, i.e. when the value of a given company's
products or services exceed all costs incurred in making the value of the product or service.
Creating value for buyers who are able to exceed the cost of production (margin) is a key concept
used in analyzing the competitive position of the company. Further analysis based on the value
chain can be grouped into five main activities and four support activities. Five main activities are
as follows: (1) Inbound Logistics, (2) Operations, (3) Outbound Logistics, (4) Marketing and
Sales, and (5) Service. While supporting activities are: (1) Resource Procurement, (2)
Technology Development, (3) Human Resources Management, and (4) Firm Infrastructure. This
concept was developed from the "Theory of the Growth of the Firm" presented by Edith Penrose
can be described as follows:
Resources are the basic capabilities of a company in the financial, physical, and human capital.
Capabilities are the company's ability to exploit resources owned in order to achieve the desired
planning. An organization can have many capabilities but little competencies.
Competencies are the manager's ability to connect with key resources and capabilities combine,
transform and direct them to satisfy customers.
Organizational Performance
Business performance reflects the achievement of the objectives economy an organization that is
reflected in the financial indicators. Financial indicator-based performance measures are referred
to as an indicator of financial performance and it has become the main model in research in the
field of strategic. Measurement used can be very different in each stage of the business life cycle.
Kaplan and Norton (2000: 42-43) divide the business life cycle into three stages.
Furthermore, the measurement of the performance of the balanced scorecard approach to
Performance evaluation is done by considering the company 4 (four) perspectives (Kaplan &
Norton, 1996), namely financial perspective, customer perspective, internal process perspective,
and learning and growth perspective.
a. Financial Perspective
Financial perspective into focus the objectives and measures in all other balanced
scorecard perspectives. Each measure must be part of a causal relationship, financial
performance measures indicate whether the strategies, goals, strategic initiatives and
implementation is able to contribute in generating profits for the company. Financial
perspective can be measured through appropriate financial ratios financial statement
profitability ratio, which is a tool to analyze or measure the level of business efficiency
and profitability achieved by the companies concerned. Generally ratios used are: (1)
Return on Assets (ROA). Ratio this ratio is used to measure the ability of management to
obtain an overall profit, and (2) Return on Investment (ROI). This measure is used to
align the income generated by the investment level.
(1) Growth
This stage is the initial stage of the business life cycle. In this stage the company usually has a
negative cash flow and return on capital is low, then the measurement used is the rate of growth
of sales or revenues.
(2) Sustain
In this stage the company is expected to maintain existing market share and gradually grow year
after year. Most at this stage the company will establish financial goals related to profitability.
This purpose can be expressed by means of the size associated with the accounting profit as
operating profit and gross margin. This measure considers the investment capital of a company is
already fixed and asks the manager to maximize the revenue generated from the capital
investment. In addition, at this stage the company was asked to not only manage the flow of
income but also the level of investment capital invested. The measures used to regularize the
profit generated by the return on investment.
(3) Harvest
A stage in which the company gains from the investment made. This stage is achieved by firms
in producing its products have reached saturation point. The company just invested in the
maintenance and repair of facilities that have been owned. The overall financial objectives for
the business at this stage are the operating cash flow (before depreciation) and saving various
working capital requirements.
b. Customer Perspective
Market segment that will be the source of a major component of financial goals, or it
could be said that the market or sales are the backbone of the company's sustainability.
Customer perspective enables companies to identify and measure the proportion of the
value to be given by the company to customers and target markets. The measure can be
used to measure the success of achieving the strategic target customers are: (1) market
share, (2) customer acquisition, (3) customer loyalty, (4) customer satisfaction, and (5)
profitability customer. Customer acquisition reflects the company's ability to attract or
win new customers or business. Customer loyalty reflects the company's ability to sustain
or maintain relationships with existing customers. Customer satisfaction reflects the
company's ability to satisfy its customers based on certain criteria (such as quality, time,
and price). Customer profitability reflects the ability of the service to the customer or a
specific market segment in generating profits.
c. Internal Business Perspective This perspective refers to the work done in the
organization. Organizations performance is measured by how the organization is run and
whether the organization can operate production or services effectively and efficiently
according implied or organizations that claim to be customers. There are three main
components, namely (1) the process of innovation, (2) operational processes, and (3) the
service process.
(1) The process of innovation.
Business unit examines emerging customer needs or are still hidden, and then create a product or
service that will meet those needs. Innovation process is divided into two parts: identifying
market needs and create products or services to meet the needs of the market.
(2) The process of operation
 The company begins from the receipt of a customer order and ending with the delivery of
products or services to customers. Delivery of products and services to existing
customers in an efficient, consistent and timely.
(3) The process of service
A service to the customer after the sale of products or services are performed. Include
warranty and repair, and replacement of defective products that are returned and
processing customer payments.
d. Learning and Growth Perspective measure matters relating to human resources. There are
three dimensions that must be considered
(1) The ability of Employees
Measurements were performed on three main points namely measurement of employee
satisfaction, measurement of employee turnover in the company, and the measurement of
employee productivity.
(2) Information System Capabilities
Measuring the percentage of availability of the information required by the employees of the
customer, the percentage of availability of information on the cost of production and others.
(3) Motivation, Granting Privileges and Restrictions Authority Employees
Done through several dimensions, namely: (a) Measurement of the advice given to the company
and implemented, (b) Measurement on improving and improving employee performance, and (c)
Measurement of the limitations of the individual within the organization. To determine the
objectives and measures related to the ability of the employees there are three things that will be
considered in this study are:
(1) Productivity of employees; the overall impact of efforts to increase employee morale and
expertise, innovation, and customer satisfaction. To compare the output generated by the number
of employees who were deployed to produce the output. To measure labor productivity and one
of the simplest measures of productivity is per capita income.
(2) Percentage Skilled Employee Training; Coaching and development of human resources is
a priority concern to increase competence in managing the management,
(3) Employee satisfaction; is a pre-condition to improve productivity, quality responsiveness,
and customer service. To achieve employee satisfaction, then the manager can conduct surveys
on a regular basis. There are several elements of employee satisfaction about involvement in
decisions (Lasdi, 2002), namely (a) Recognition; (B) Access to information; (C) active
encouragement to creativity and initiative; and (d) Support boss Gaps in the financial aspect,
customers, and internal company processes can be detected. Human or corporate employees need
to be given regular training to increase skills or abilities in order to meet changing customer and
environmental guidelines. To measure the importance of a business organization to continue to
pay attention to their employees, to monitor the welfare of employees and increase employee
knowledge. This happens due to the increased level of knowledge of employees will increase the
ability of employees to participate in the achievement of corporate goals. Excellence in the
balanced scorecard concept of strategic planning system is able to produce a strategic plan that
has the following characteristics
(1) Comprehensive
Balanced scorecard broadens perspectives covered in strategic planning. Expansion perspective
of strategic plans for the non-financial perspective generates benefits consist of: (1) Promising
financial performance and sustainable multiplied; and (2) the ability of the organization to enter
complex business environment.
(2) Coherent
Balanced scorecard requires personnel to establish a causal link between the strategic objectives
resulting in strategic planning.
(3) Balanced Balance of strategic targets generated by the system of strategic planning is
important to generate long-term financial performance.
(4) Measured Measurable strategic targets generated by the system of strategic planning
promising achievement of strategic objectives generated by the system. In this study decamping
4 (four) balanced scorecard perspectives, researchers also will exclude social perspective as one
measure of organizational performance. This is done because the object of study in this research
is a microfinance institution. In general, one of the indicators of the success of the institution in
question is their ability to reduce poverty.
e. Social Perspective
Especially for Microfinance Institutions (MFIs) there is a social aspect that should be added for
performance assessment such institution. This addition is based on the argument that in order to
measure the performance of an MFI, we not only consider the aspect of financial sustainability
(balanced scorecard) of the organization, but also must consider aspects of improving the living
standards of clients (social perspective) as a measure of the success of an MFI's principal,
including Cooperative Financial Services in it. This is in line with research that has been done on
Microfinance Institutions MDF-Kamurj in Armenia and Pawlak & Egusquiza (2007) on the
NGO Manuela Ramos-CrediMUJER in Peru.
Theoretical Framework Effect of the Business Environment and Organizational
Performance
The development of human resources, organizational development, the background manager,
managerial leadership and competitive strategy is an important component that affects the
performance of the organization (SMEs). Further, we need a re-Explored on their research to
include external factors, such as the role of government, competition, and so on. The results of their
research to document empirically that both internal factors (availability of start-up capital, the
desire for self, family support, a model of entrepreneurship, personal skills, and work
experience) and external factors (availability of assistance and support from the government, the
availability of processing technology, availability of raw materials, and option markets)
simultaneously and positively affect the growth of small businesses. Research results conclude
that government regulation, competition and business location significantly influence business
strategy. This research attempts to explain and predict the effects of external and internal
environment for the performance of Cooperative Financial Services.
External environment
A. competition
B. Government regulation
C. Environmental uncertainty
Internal environment
A. Cooperative management
B. Human Resources
C. capital
D. Member participation
*This External and Internal factors have Impact on Organizational Performance (Balanced
Scorecard)
The business environment effect on the organization performance. The organization performance
can be improved through increases in the business environment.